We can only offer real value to our customers, invest in service in-store, improve returns to shareholders and drive growth for the future by being as efficient as possible across the business. The replacement of our ageing systems through our Evolve programme and the enhancement of our constrained distribution network, both of which are well advanced, are key to delivering efficiencies throughout the business.
A strong culture of cost control exists within Morrisons. We are planning to build upon this through our Excavate project in which the responsibility for purchasing goods not for resale will be centralised and costs driven out of the business, and through our Fresh Working trial, which seeks to improve the way in which we operate our stores.
Morrisons is the fourth largest grocery retailer in the UK. We remain under-represented in many parts of the country and we estimate that there are some 6.8m households in the UK who are not located within a convenient 15 minutes drive time from a Morrisons store. This is a higher target customer base than any of our three larger competitors. A key part of our strategy, therefore, is to increase the number of Morrisons stores. In 2010 we set an objective to add 1.5m square feet of selling space in the three years to January 2013. Our first year target was 400,000 square feet and we are pleased to have met this. With our new property team now in place we have an opportunity to capture space more quickly and accordingly are now targeting to deliver 2.5m square feet of new space in the 3 years to January 2014, in addition to the space to be created through the Liberate project.
At our interim results in September 2010, we announced our intention to invest a further £200m in extending the range of our food production capability, enhancing our point of difference in producing the food we sell.
The convenience sector is the second fastest growing part of the grocery market and as such is an area that we are evaluating carefully. Our success in operating smaller stores in recent years has given us the confidence that we can offer customers something different, with great fresh food. We will explore the opportunity of extending our customer reach with a three store trial during 2011 under the name 'M local'. We are pleased to have identified the trial locations, the first of which will open in July.
In September at our interim results we also announced that we would undertake research into the e-commerce channel, recognising that the fastest growing sector in grocery retailing is online shopping.
As we researched this channel, we became convinced that Morrisons should be transacting online, as our customers wish us to offer this option. Our research has shown that to do this effectively has significant challenges and that building such capabilities from scratch takes time. We believe we can build a profitable business online, and we are therefore now committing to launch Morrisons.com, for both grocery and non-food products, in the coming two years.
In support of this goal, we are delighted to be making two investments that we believe will help us to launch our e-commerce activities successfully in the future, and in an accelerated way.
The first is the acquisition, previously announced, of kiddicare.com, for £70m. This is a highly successful, specialist retailer operating in the baby and infant merchandise category. It has a truly innovative approach to e-commerce and to serving its customers, and operates an extremely well built technology platform. We intend to grow this business organically, under the continuing leadership of Scott and Elaine Weavers-Wright, two of the best known retailers in UK e-commerce. We believe the business, its products and its customers will fit extremely well alongside Morrisons. In addition to the kiddicare.com acquisition, we are also acquiring absolutely the rights to the kiddicare.com operating and technology platform. This extremely well built, flexible platform will put Morrisons in
an early position to launch its e-commerce operation for general merchandise categories, and we expect to launch this gradually from the Spring of 2012.
The second is a £32m investment in FreshDirect, a profitable, fast growing and highly successful internet grocer serving the New York market. We will be taking a c10% stake in the company, with a seat on the Board and the opportunity to embed a team of Morrisons people in the business to learn how it operates. They have been building their business for 12 years, are profitable and growing like-for-like sales at over 20%. We believe our investment will, itself, be highly successful, but that the learning we will get from
it will be invaluable. This investment is the first step in developing the offer that we will ultimately launch in the UK.
These two investments will help us to learn from the very best, and get us going. We believe as a result we will get to the right answers faster in both grocery and non-food internet retailing.
We are determined that in both these new channels of online and convenience we will offer customers something which is distinctively Morrisons.